Insolvent when they cannot pay their debts
Insolvency
GmbHs and Ags are considered insolvent when they cannot
pay their debts as they fall due (illiquidity), or when, on the
company’s balance sheet or interim statement, liabilities exceed
the value of the assets, measured at their going-concern value.
This defciency of assets is known as “over-indebtedness”
(Überschuldung). Over-indebtedness, however, does not cause
insolvency of the corporation if there is a predominant probability
that the business can be continued.
If a situation of over-indebtedness or illiquidity is identifed,
the managers of the corporation must fle a petition for the
commencement of insolvency proceedings with the local district
court without culpable delay, at the latest after three weeks.
Otherwise, they may be held personally liable and subject to
criminal penalties.
A petition for the commencement of insolvency
proceedings may also be fled against the company by any
creditor.
EU Forecast
euf:ba18f:148/nws-01